The Wisconsin Public Service Commission should not approve at this time an application by Wisconsin Public Service Corp. to install a ReACT emissions control system on Unit 3 of its coal-fired Weston power plant, said Jeremy Fisher of Synapse Energy Economics Inc.
Testimony from Fisher, working for environmental group Clean Wisconsin, was filed Dec. 10 at the commission.
“After adjusting for flaws, errors, and biases in the Company’s model, I conclude that implementing ReACT is a net liability, rather than a net benefit to ratepayers,” Fisher wrote in the public version of his heavily redacted testimony. “At best, continuing to operate Weston 3 with ReACT results in a liability of (redacted], but probably closer to a liability of [redacted]. This liability stands in stark contrast to the +$293 million benefit claimed in the initial application or +$260 benefit shown in the updated modeling results, supplied October 5, 2012.”
Fisher said his objection is three-fold.
- First, he believes that the company should not pursue construction of ReACT in advance of a finalized settlement agreement with the U.S. Environmental Protection to remedy a notice of violation. Doing so would put ratepayers at significant risk for additional costs not currently considered or disclosed by the company, and would risk creating redundant and unnecessary costs for ratepayers, he added.
- Second, the analysis pursued by the company to justify the ReACT project is “functionally flawed, erroneous, and inappropriately biased against replacement of Weston 3,” he added.
- Third, the company failed to examine legitimate opportunities to replace the energy and capacity from the Weston 3 unit, like additional energy efficiency or other demand-side management options.
After any settlement with EPA, the utility should re-assess the technology options available to meet the settlement terms as well as other impending or known regulatory requirements, and evaluate the cost efficacy of retaining the Weston 3 unit at that time, Fisher argued. “I further suggest that the Commission require the Company to assess all cost-effective opportunities to replace energy and capacity from non-economic coal units, including Weston 3, with energy efficiency and other demand-side management measures, where the measure of cost-efficacy includes the avoided cost of capital investments at retiring units.”
In a Dec. 6 response to a Clean Wisconsin request for an updated on the status of the NOV talks with EPA, the utility responded: “As described in past correspondence with Clean Wisconsin, it is WPSC and EPA’s position that the settlement communications cannot be produced to Clean Wisconsin without violating the confidentiality agreement. There have been no other communications between WPSC and EPA related to the NOV other than settlement communications.”
WPSC applied May 7 at the commission for this project on the 321-MW Unit 3 at Weston. The site currently has four coal units, two gas/oil-fired combustion turbine generators, and auxiliary equipment such as substations and fuel supply systems. Weston Unit 3 is WPS’s second newest and second largest coal-fired facility. The unit went into service in 1981, has a heat rating of 3,423.48 mmBtu/hr and burns primarily Powder River Basin (PRB) coal.
Of all of the units in WPS’s fleet, Weston Unit 3 is the first choice to install additional controls. Pulliam Units 5-8 and Weston 1-2 are older, smaller and less efficient units than Weston 3. Installation of the ReACT technology at Weston 3 would free up annual SO2, annual NOx, and ozone season NOx allowances that WPS said it could use for compliance at other units.
WPSC, a subsidiary of Integrys Energy Group (NYSE: TEG), said in a May 7 announcement that it expects, based on historical data, the project will reduce plant SO2 emissions by more than 90%, mercury by 90% or more, and NOx by more than 20%.
ReACT is an advanced regenerative activated coke technology that provides for control of SO2 with a coincident reduction of NOx, mercury and other pollutants. The system also produces commercial grade sulfuric acid, a commercially marketable by-product. The ReACT system’s total capital cost estimate, including allowance for funds used during construction (AFUDC), is $288m at Weston 3.